The Suez Canal Bank put into effect its exit of the Middle East Oil Refining Company (MIDOR) on Thursday, by selling its 1.27% share of the company’s capital.
The bank’s exit comes after it obtained the necessary approvals from the Financial Regulatory Authority (FRA) and the Egyptian Exchange (EGX).
The Suez Canal Bank’s Board of Directors agreed to sell 560,000 shares at a total value of $30.6m, or $54.70 per share, to MIDOR’s main shareholder, the Egyptian General Petroleum Corporation (EGPC).
Suez Canal Bank Chairperson, Hussein Refaei said that the exit process is part of the bank’s investment policy, and within a comprehensive strategy to restructure its investment portfolio. It was completed to maximise returns on investments and strengthen the bank’s capital base, whilst enhancing capital adequacy indicators to support growth and expansion plans.
Refaei added that exiting from this contribution provides excellent opportunities to expand the bank’s transactions with the EGPC and its subsidiaries, including MIDOR and its related parties. This would occur through the Suez Canal Bank providing a variety of financial, banking and consulting services. It would also take into account the oil sector’s strategic importance as one of the Egyptian economy’s most important sectors.
He said that the decision to exit from the MIDOR contribution was based on a number of rationales, including the completion of the bank’s role since its 1998 entry as a shareholder in the company. The bank’s low percentage share in the company was also insufficient to hold a board seat, and did not affect the company’s decision-making process.
Refaei also pointed to the exit’s positive impact on strengthening the bank’s capital base and on the criterion of capital adequacy, through the capital gains realised from the exit. This will directly reflect on the bank’s equity, where the outcome of the capital gains achieved from the deal is estimated at about $5.7m.
